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How to Trade 5 Health Insurance Companies

It's been more than six years since the Affordable Care Act became the law of the land. With a new president in November, the law could change a little or a lot. So how can investors trade this sector now?

Aetna (AET - Get Report) , Anthem (ANTM - Get Report) , Cigna (CI - Get Report) and Centene (CNC - Get Report) have similar chart patterns setting all-time highs between June 22, 2015, and July 2, 2015, during a period of merger activity and at the height of the Obamacare hype. Presented today are the Fibonacci Retracements from these highs to the 2016 lows.

UnitedHealth (UNH - Get Report) set its 2015 high on Aug. 18; then the component of the Dow Jones Industrial Average (INDU) survived the volatility of the flash crash of Aug. 24. This stock set its all-time high on April 20, following news that it would suspend most of its participation on HealthCare.gov in 2017.

Among the first four above there were three mega-mergers that have produced questionable results. The deals merged Anthem and Cigna, which both still trade independently; Centene and HealthNet; and Aetna and Humana, which also trade separately.

Cigna reports quarterly results before the opening bell on May 6. Analysts expect the company to earn $2.17 a share. The stock is currently trading just below its 50-day and 200-day simple moving averages of $138.72 and $138.75, respectively.

Centene reported quarterly results on April 26 and matched earnings estimates. The stock tested and held its 200-day simple moving average of $61.24 on April 29.

UnitedHealth reported quarterly results on April 19 and beat earnings estimates. The stock responded by setting its all-time high of $135.11 on April 20.

Here's a scorecard for the five health care stocks, followed by their weekly charts and key trading levels.

Here's the weekly chart for Aetna.

Courtesy of MetaStock Xenith

The weekly charts show a red line through the price bars, marking the key weekly moving average (a five-week...